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Seeking advice on picking a new broker
Old 07-26-2011, 06:14 PM   #1
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Seeking advice on picking a new broker

Our long time broker is retiring. Through buy-outs over 20+ years he ended up at Wells Fargo Advisors, not company we'd choose. We've stuck out of habit. They want to ease us into a new account exec but we're not buying.

I'm going to check out the local Crowell Weedon office tomorrow and considering speaking with local CFPs who are affiliated with Raymond James and Edward Jones. I'm a bit leery of independents. And I won't sign on with a brokerage that is beholdin' to a megabank's interests.

We have one smallish IRA with Schwab but for our primary account, we want access to personalized guidance and support. I've downloaded several "Ten Questions to Ask..." sheets but would appreciate any input on making the selection, especially on the companies I've named. There's lots of advice on what to ask, but I'm also interested in what I should expect to be asked. Or not!
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Old 07-26-2011, 06:18 PM   #2
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I would ask Raymond James and Edward Jones what their ER's are. Once you find out that they are charging you about 2% or so then ask what makes them entitled to 1/2 of your retirement 4% SWR.
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Old 07-26-2011, 06:19 PM   #3
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I use Schwab. I'm pretty independent with my own investing. I do know a guy in So Cal who is a financial planner. I think with him, you would do your own buying and selling, but he could advise you. If you are interested, PM me.

Full disclosure: I don't know how he charges...never asked. He is my DD's soon to be father in law.

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Old 07-26-2011, 06:28 PM   #4
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I would ask Raymond James and Edward Jones what their ER's are. Once you find out that they are charging you about 2% or so then ask what makes them entitled to 1/2 of your retirement 4% SWR.
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Old 07-26-2011, 06:29 PM   #5
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I would ask Raymond James and Edward Jones what their ER's are. Once you find out that they are charging you about 2% or so then ask what makes them entitled to 1/2 of your retirement 4% SWR.
It's that "personalized guidance and support."
"Where are the customer's yachts?"
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Old 07-26-2011, 06:30 PM   #6
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It's that "personalized guidance and support."
"Where are the customer's yachts?"
Next to their Brokers Yachts.
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Old 07-26-2011, 07:08 PM   #7
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We have one smallish IRA with Schwab but for our primary account, we want access to personalized guidance and support.!
If you don't feel comfortable doing it yourself then you want to use a fee only advisor (Working with a Fee-Only Advisor - NAPFA - The National Association of Personal Financial Advisors) for this. It is much cheaper than using a commission compensated broker.

If you want to learn how to DIY there are plenty of books and resources listed here An updated FIRE recommended reading list (with a military twist) and at Bogleheads Investment Books

DD
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Old 07-26-2011, 07:08 PM   #8
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It's that "personalized guidance and support."
"Where are the customer's yachts?"
And birthday cards.

Don't forget the birthday cards.
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Old 07-26-2011, 08:30 PM   #9
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And birthday cards.

Don't forget the birthday cards.
+1
Some years I even got Thanksgiving and/or Christmas cards.
Then there were the years I got a card that said "A donation has been made in your name". Like they think we don't know they got the tax deduction and are passing it off as a gift.. Well...I guess they did have to pay for the card and a stamp.
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Old 07-26-2011, 10:07 PM   #10
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There's lots of advice on what to ask, but I'm also interested in what I should expect to be asked. Or not!
"Boy, how much money you got?"

Ha
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Old 07-27-2011, 03:41 AM   #11
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You are in the midst of a bunch of DIYers.

Most of us do not use them... and what good is the advice of another person that is in your situation? What would they know?


Broker questions.... for you??


No offense... but since others have not said it "directly" yet, I guess I will...


All they are going to ask is how much money do you have! Why? Because they will be interested in commissions and fees. Plus, some will want to make sure you have enough money to bother with (low networth means low commissions and fees for them)!


Wise up and do yourself a favor... that could be good for your wealth! Read "Winning the Losers Game" by Charles Ellis or "The Investor's Maifesto" by William Berstein... they are recent publications. Or any of the many John Bogle books (for the last 20 years). Most of these books are not huge... couple hundred pages... and dumbed down for the average person (for the non-financial professional... you don't need an MBA). They will make reference to other books that get deeper if you want to learn!
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Old 07-27-2011, 04:37 AM   #12
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Is this the first time anyone has asked about recommending a full-service broker on the forum? Most folks ask about online discount brokers where one pays no fees and no commissions.

In strange twist of irony, it turns out that WellsFargo has one of the best online brokers with absolutely no fees. They are called WellsTrade, but they are only free if one has a WellsFargo PMA package going. "PMA package" is the key word. One can sign up for PMA in the WellsFargo bank, but not for the free WellsTrade stuff. Once you have PMA package, you sign up online for the WellsTrade brokerage account. See https://www.wellsfargo.com/investing/styles/wt/


The highly paid brokers/salesreps in a WellsFargo bank will act clueless about the free WellsTrade stuff, so don't expect anybody inside the bank to be helpful with telling you about the free WellsTrade.
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Old 07-28-2011, 02:09 PM   #13
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If you don't feel comfortable doing it yourself then you want to use a fee only advisor (Working with a Fee-Only Advisor - NAPFA - The National Association of Personal Financial Advisors) for this. It is much cheaper than using a commission compensated broker.

DD
Thanks. I posted hoping to get some insight from folks who've been through the selection process before and have some experience they might relate. A fee-only advisor sounds attractive, but a list of local names from an association website and advisor websites full of platitudes isn't much to go on to pick a winner.
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Old 07-30-2011, 06:54 AM   #14
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Another vote (with LOL!) for moving to a self-directed account at Wells Fargo with a PMA account. You get 100 free trades per account per year, along with free checking. Then hire a no-fee financial advisor who doesn't charge a percentage of your portfolio.
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Old 07-30-2011, 12:07 PM   #15
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... Then hire a no-fee financial advisor who doesn't charge a percentage of your portfolio.
No-fee? Are you suggesting someone who works on a fixed fee or hourly rate? I've seen a listing for a local CFA that works that way. I'm a little at odds with the idea of the meter being turned on when ever I'd call. The fee schedule indicated fairly high event cost and lawyer-like hourly rates; it would pretty costly for moderate activity, especially the first year or so. I also prefer that the adviser has some skin in the game.

I've interviewed a fee-only adviser firm who works for 1% of account value, and I was impressed by their thoroughness, their relatively low number of clients, and their individual resumes as analysts and in mutual fund management rather than as acct execs at big brokerages or insurance. I'm not adverse to paying 1% if some one will consistently earn me more than I could on my own (not hard) or a commission brokerage would.
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Old 07-30-2011, 12:27 PM   #16
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Here is a good site to look up what brokers and Registered Reps are thinking when they meet clients:
Registered Rep Forums |
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Old 07-30-2011, 12:30 PM   #17
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No-fee? Are you suggesting someone who works on a fixed fee or hourly rate? I've seen a listing for a local CFA that works that way. I'm a little at odds with the idea of the meter being turned on when ever I'd call. The fee schedule indicated fairly high event cost and lawyer-like hourly rates; it would pretty costly for moderate activity, especially the first year or so. I also prefer that the adviser has some skin in the game.

I've interviewed a fee-only adviser firm who works for 1% of account value, and I was impressed by their thoroughness, their relatively low number of clients, and their individual resumes as analysts and in mutual fund management rather than as acct execs at big brokerages or insurance. I'm not adverse to paying 1% if some one will consistently earn me more than I could on my own (not hard) or a commission brokerage would.
I would not consider a 1% of assets a "fee only" advisor. Fee only is a flat fee for performing a specific function or hourly rate (and if you think that rate is high calculate what 1% per annum of your portfolio is!). To put that 1% in perspective the SWR (http://www.bogleheads.org/wiki/Safe_Withdrawal_Rates) is ~ 4% annually. So you are giving the advisor 1/4 (25%!!!) of your SWR. Of course they will tell you they will earn back that amount for you with their superior knowledge and skill. This IS NOT true. NO academic study (ie not paid for by the industry) has shown that they beat the market by enough to make up for their costs, let alone provide more money for you.

I would suggest reading from the recommended list here: An updated FIRE recommended reading list (with a military twist) or here: Investment Books.

It is NOT hard to do this yourself - the industry wants you to think it is and that they have special knowledge. This reading would be worthwhile even if you decide you still need some help/handholding in creating and managing your portfolio.

DD
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Old 07-30-2011, 12:49 PM   #18
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Here is a good site to look up what brokers and Registered Reps are thinking when they meet clients:
Registered Rep Forums |
Those are really funny. Only surprising to someone who has never had to sell something to put food on the table.

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Old 08-03-2011, 03:47 PM   #19
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I have some experience with Crowell-Weedon and I think they are OK, they 'advice' on investments for a fraternal group I am a member of. I also think Osher Van de Voorde (Pasadena) are OK, they 'manage' my MIL's portfolio and I (and the rest of the family) keep an eye on them. I could manage the portfolio myself but don't want the official responsibility inside the family. I have DW's IRA in Vanguard funds (Wellesley & Star) and mine are 60% in index funds and 40% I manage in a Wells Fargo account, also have a small trading account with them. Don't know how long it will last but the WF PMA is hard to beat, 100 free trades per account and a lot of choices and a decent trading interface.
By the way, with all these investment choices my wife's funds in VG Wellesley/Star have done the best.
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Old 08-04-2011, 03:30 PM   #20
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Any thoughts about using an investment "coach" who charges a pretty high commission, but only on gains in excess of 5%? As a thought for someone who knows naught about investing and whose savings is just sitting there right now.
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